How to Protect Your Small Business
Protect your small business from potential lawsuits., Assess your ability to withstand a catastrophe., Watch your cash and profits., Work with a good tax attorney or financial advisor.
Step-by-Step Guide
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Step 1: Protect your small business from potential lawsuits.
Lawsuits can be expensive, even if you are confident that you will win.
You will still have to pay for legal representation and spend a lot of time defending your company.
Watch your actions and words.
Avoid doing business with people who have a reputation for unscrupulous behavior and do not engage in questionable business practices.
Be careful of conflicts of interest.
Avoid situations that could be perceived as suspicious as well.
Insure your small business.
Make sure you have enough liability insurance and consider additional coverage such as errors and omissions insurance or a directors and officers (D&O) policy if you operate under a board of directors. -
Step 2: Assess your ability to withstand a catastrophe.
An unexpected disaster such as a fire or a hurricane could destroy your business, leaving you without income or a plan to rebuild.
Talk to your insurance agent about what is appropriate for your small business.
Each business has different needs.
Develop a crisis plan.
If disaster strikes, you and your employees should know exactly what to do.
Include plans for any inventory, technology and how you will communicate with your customers. , Keep checks and balances and other controls in place to avoid being robbed or losing your hard-earned profits.
Be careful who you hire.
Conduct background checks and screen all employees and consultants, especially those with access to company finances.
Audit your business finances at least every quarter.
Require timely payments from clients and customers.
Waiting for payments can cause cash flow problems.
Insist on payment for services and goods within a reasonable amount of time, such as 30 days. , Small businesses are eligible for many tax breaks.
Make sure you are taking advantage of all of them. -
Step 3: Watch your cash and profits.
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Step 4: Work with a good tax attorney or financial advisor.
Detailed Guide
Lawsuits can be expensive, even if you are confident that you will win.
You will still have to pay for legal representation and spend a lot of time defending your company.
Watch your actions and words.
Avoid doing business with people who have a reputation for unscrupulous behavior and do not engage in questionable business practices.
Be careful of conflicts of interest.
Avoid situations that could be perceived as suspicious as well.
Insure your small business.
Make sure you have enough liability insurance and consider additional coverage such as errors and omissions insurance or a directors and officers (D&O) policy if you operate under a board of directors.
An unexpected disaster such as a fire or a hurricane could destroy your business, leaving you without income or a plan to rebuild.
Talk to your insurance agent about what is appropriate for your small business.
Each business has different needs.
Develop a crisis plan.
If disaster strikes, you and your employees should know exactly what to do.
Include plans for any inventory, technology and how you will communicate with your customers. , Keep checks and balances and other controls in place to avoid being robbed or losing your hard-earned profits.
Be careful who you hire.
Conduct background checks and screen all employees and consultants, especially those with access to company finances.
Audit your business finances at least every quarter.
Require timely payments from clients and customers.
Waiting for payments can cause cash flow problems.
Insist on payment for services and goods within a reasonable amount of time, such as 30 days. , Small businesses are eligible for many tax breaks.
Make sure you are taking advantage of all of them.
About the Author
Brian Cox
Dedicated to helping readers learn new skills in DIY projects and beyond.
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